How the right ten-year warranty results in better product quality


For an electricity meter, most users would agree that a longer warranty is always better. It is obvious that a longer warranty benefits the purchaser, in that it lowers the cost of ownership by reducing repair and/or replacement costs. What may be less obvious is how a long warranty can be used by a manufacturer to drive product quality improvements that further reduce ownership costs. Schweitzer Engineering Laboratories (SEL) uses its ten-year warranty to improve product quality—this is what we mean by the ‘right’ warranty.

The SEL ten-year warranty provides a strong economic incentive for users to return any failed product to the factory, because the no-questions-asked warranty policy covers failures for any cause, including user application errors such as overvoltage. SEL ‘Product Hospital’ technicians analyse each returned product to determine the cause of the failure and log the details in a database. This is a necessary step to repair the product, but it is also vital in improving product quality.

One way to repair a product is simply to replace the failed part or the entire product and return it to the customer. This process would not, by itself, improve quality. A better approach is to analyse the failure to find the root cause of the condition. Once root cause has been determined, our quality and design engineers implement improvement actions to preclude this failure mechanism in future products.

For example, a product received by the Product Hospital may be found to have a broken lead on a capacitor. Root cause analysis requires us to ask: “Why did the capacitor lead break?” This analysis may lead us to determine that the capacitor lead broke during shipping due to large mechanical forces on the leads. The way to improve this is to change the design or assembly process so that the leads do not mechanically support the capacitor. With this improvement, we do not ship new products with this same potential failure mechanism.

In contrast, if a product has a short warranty, e.g. 1 year or 18 months, the customer may not return a failed product to the manufacturer, even though it is expected that the product should last many more years. The customer may even scrap the failed product instead of having it repaired, because shipping, handling, and repair costs are more than the cost of a new product. As a result, there is no root cause analysis and there is no improvement to the product’s design or manufacturing process.

The continual improvement of product quality that comes from root cause analysis has another very important benefit. As potential design or manufacturing problems are eliminated, reliability of the product increases. Reliability is the ability of the product to perform to specification for an extended period of time. The failure rate, or Mean Time Between Failures (MTBF) measures reliability. Collecting data from all devices over a ten-year warranty period provides an accurate, measured MTBF instead of an estimated or calculated value.

An MTBF of 20 years does not mean that the meter service life is 20 years. It means you can expect one meter to fail each year for every 20 meters in service. Higher MTBF means fewer removals. For example, a meter with a 300-year MTBF predicts only one failure each year for every 300 meters installed. This minimises time spent on maintenance and all of the associated expenses. Continual improvement based on analysis of warranty returns has increased the SEL MTBF from under 200 years to over 300 years.

Whether or not meters are cost-effective and reliable can really depend on the right warranty. The right ten-year warranty benefits both the manufacturer and the customer, because it helps the manufacturer improve reliability and reduces the customer’s ownership cost.

A comprehensive warranty:

  • Minimises repair and replacement costs to the customer
  • Drives improvements to product quality and reliability
  • Maximises the life of the product
  • Minimises the total cost of ownership of the product
  • Ensures that everyone wins.

Make sure you use devices with the right warranty.